Law: Gift Tax Act, 1958

Section: 5(1)(viii)

Law: Gift Tax Act, 1958

Section: 5(1)(viii)

Section 5(1)(viii) of the Gift-tax Act, 1958 - Exemption - Gift to spouse - Assessee, manager of HUF, made gift of some property belonging to joint family to his wife - Assessee's claim for exemption under section 5(1)(viii) was allowed by GTO - Commissioner, however, revised order of GTO and levied tax under section 32 - Tribunal upheld Commissioner's order - Whether since words of gift deed made it abundantly clear that assessee made gift in his capacity of husband, said gift could not be excluded from ambit of section 5(1)(viii) and, therefore, GTO was right in granting exemption - Held, yes FACTS The assessee who was the manager of a joint Hindu family made a gift of some property belonging to the joint family to his wife. He submitted a return of the gifts made by him and claimed exemption in respect of the gift to his wife. The GTO allowed the exemption, under section 5(1)(viii ). But the Commissioner having found that the gift could not be regarded as falling within the scope of section 5(1)(viii) since the donor happened to be the manager of the joint Hindu family, revised the order of the GTO and levied tax under section 32. On appeal the Appellate Tribunal upheld the order of the Commissioner. On reference : HELD It is indisputable that if a gift is made by the husband to the wife or vice versa and is within the limits prescribed by clause (viii ) of section 5(1), it is exempt from gift-tax. Having regard to the tenor and language of the gift document, it could not be denied that the gift in question was by the husband to the wife. It might be stated that there was nothing in the document to indicate that he was making the gift in any capacity other than as a husband. There was thus no obstacle in the way of the applicability of section 5(1)(viii ). The controversy related to the capacity, in which he made the gift. It could not be postulated that he made the gift as the manager of the family, since the words of the document made it abundantly clear that it was in his capacity as the husband that he made the gift. If that were so, there was no reason why this gift should be excluded from the ambit of clause (viii ) of section 5(1), thus, the GTO was…

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